Occasionally when people talk to me about my new life in and around the mud hut, their conclusions include one of the following statements: (1) You’re selfishly wasting your talent as an excellent and inspiring teacher. You should be teaching at the university, saving students, instead of preparing for economic collapse. (2) Don’t be silly. The United States cannot suffer economic collapse.
My responses go something like this:
(1) At most, I made a minor difference for a few students during a two-decade career. I could keep doing that but, in the near future, that approach would kill me because it requires living in a major metropolitan area. I’m not willing to die for that particular cause. (The problem with being a martyr is that you have to die for the cause.) (2) Have you failed to notice the economic world around us? We passed TEOTWAWKI when the suburban housing market collapsed. So we socialized Fannie Mae and Freddie Mac. Then we socialized the financial system and the automobile industry. Call is socialism for the rich, capitalism for the poor, to quote Paul Ehrlich and Anne Ehrlich in One with Ninevah. I’d guess we have six months to three years before there is no more fuel at the filling station, food at the grocery store, or water coming out the taps.
More often, the conversation goes something like the following. It typically includes a middle-aged, middle-class American (MAMCA) visiting with me, although my role often is subsumed by a student responding to his or her parents as they play the former role.
MAMCA: Nice place you have here. Thanks for the tour. Do you really think the economy could collapse?
Me: Of course. In fact, the collapse — which, by the way, I prefer to call a Renaissance — is fully under way. The U.S. industrial economy nearly came grinding to a halt five times (that I know about) during the last year. According to Dmitry Orlov, author of Reinventing Collapse, we’re in the second of five stages of collapse (we passed financial collapse, we’re in the midst of commercial collapse, and political, social, cultural collapse lie ahead — unlike Orlov, I’d say social and cultural collapse have already happened in many locations, and we’re poised on the brink of political collapse).
MAMCA: Well of course the Soviet Union collapsed. Everybody saw that coming. There is no way to sustain socialism, after all But I don’t see any way this country could suffer a collapse. How could that happen?
Me: First off, it’s already happening, one household at a time. It could visit your household any number of ways. We passed the world oil peak several years ago, and demand seriously outstripped supply last summer, when the price of crude oil topped $147/barrel. That led to the failure of the suburban housing market, the failure of several banks, and socialization of banks and General Motors. Unemployment is skyrocketing and the nation’s “safety nets” are full of holes. Could you get caught in the unemployment wave? Probably not. Could you find yourself under water on your mortgage? Probably not. But many people, many households, have already collapsed under the weight of those two problems. Can you afford gasoline at $5 per gallon? Sure. But a lot of companies, large and small, cannot afford expensive fuel for a sustained period of time. When those businesses go under, they take real people down with them. At some point, all the banks collapse because the banking system only works when the industrial economy is growing. And the economy simply cannot grow when oil is too expensive because expensive oil eats up GDP and causes hyperinflation. The typical approach with individuals, groups, or economies is the same: they grow or die.
MAMCA: Okay, but how do we get from expensive oil to economic collapse? How do we get to no water coming out the taps? I just don’t see how that can happen. For starters, we’ll develop alternative energy sources when needed.
Me: First off, bear in mind that an annual decline rate of only one-half of one percent led to $147 oil. The International Energy Agency, a group that previously never admitted oil would peak, projected a decline rate of nine percent from this year forward. They’ve been wrong so far — data indicate an annual decline rate of only three percent so far, and demand destruction in the form of the ongoing recession is staying ahead of the three-percent decline rate. But if the recession shows signs of recovering, the price of oil will rise again. Oil priced at $150 per barrel consumes one-quarter of the world’s GDP, leaving little slack in the system. Second, there are no “renewable energies” that scale to a few million people, much less a few billion. All energy sources are derivatives of oil, not alternatives: It takes a lot of oil to make a solar panel, or a wind turbine. And try putting those in your car or truck. The bumper stickers are right, after all: “Without trucks, America stops,” at least with respect to economic growth.
All that aside, would you continue to go to your job if you weren’t getting paid, or if the paycheck kept bouncing? How about if money wasn’t work a thing?
MAMCA: I suppose not, at least not indefinitely.
Me: Would you continue to work if your employer has no financial value? That is, if the company is worth nothing on the stock exchange?
MAMCA: Of course not. That would mean they couldn’t pay anybody. But I don’t see how that leads to no fuel, no food, and no water out the taps.
Me: All fuel suppliers in this country are private. We have not nationalized our petroleum companies (yet). So if those companies have no value, do you suppose the drivers are going to keep delivering the fuel to the filling station? Ditto for Safeway.
MAMCA: Okay, I’ll reluctantly agree that we could, eventually, have no fuel and no food. But no water out the taps?
Me: Who supplies your water?
MAMCA: I don’t know.
Me: It’s either a private company or, more likely, a municipality. The employees at the municipalities have to cash their checks, too. To do so, a bank has to issue the check and a bank has to cash it. Perhaps the more important question is, “Where does your water come from?”
MAMCA: The tap, of course.
Me: And if you believe water originates at the tap, you’ll defend to the death the system that allows water to come out the tap. But of course water doesn’t originate with the tap, it originates in the watershed. When people realize where the water actually comes from, perhaps they will defend to the death the system that supplies the water, meaning an ecosystem. But I doubt it.
MAMCA: What you’re suggesting is that protecting the environment is more important than maintaining economic growth. But don’t we need economic growth to have the money to protect the environment?
Me: I don’t think we’ve ever made a serious attempt to protect the environment in this country. We occasionally take small steps to conserve specific areas after we ensure economic growth. But economic growth is the underlying root of environmental destruction. When we demand economic growth first, we postpone environmental protection until later. And it’s getting very, very late.
MAMCA: What do you mean by that?
Me: According to recent projections from large climate-forecasting groups, we’re very close to a tipping point, if we haven’t passed one already. Global climate change is accelerating as a result of economic growth. If we don’t halt or reverse global climate change, we’re doomed to extinction at our own hand.
MAMCA: But we can’t simply give up economic growth to save the planet, can we?
Me: No, apparently we’re unwilling to take that step, sane as it seems. We’d rather reduce the planet to a lifeless pile of rubble than slow economic growth.
MAMCA: Surely we can have both economic growth and protection of the environment.
Me: I’ve never been shown how that’s possible. Economic growth destroys habitats and species. Ultimately, it will destroy habitat for our own species, perhaps in as little as a single generation. We should welcome the ongoing Renaissance.
MAMCA: But no economic growth? You’re committing my children to a future of poverty.
Me: No, you already did that. In fact, our entire generation of Boomers did that when we abandoned the goal of living close to the land and close to our neighbors for the sake of economic growth. When we were offered a choice between the good life and “daylight in America,” we chose Ronald Reagan and the notion that greed is good. As a result, we burned through the planetary endowment of fossil fuels at a record-setting clip, hence polluting our waters and skies while ensuring your children are addicted to fossil fuels, economic growth, and technology. But if they’re like most 20-year-olds, they have no relationship with the living planet beyond the Discover channel and their Facebook friends.
MAMCA: An economic collapse sounds horrifying. People will die. Many of those people had nothing to do with this mess.
Me: As has always been the case.
MAMCA: What do you mean?
Me: The industrial economy is basis of American Empire. Imperialism kills people every day, and most of them had nothing to do with this mess.
MAMCA: I was talking about Americans.
Me: So was I.
MAMCA: But many Americans will be caught up in the collapse. Most people in this country do not know how to live if there’s no water coming out the taps.
Me: No, of course not. We’ve overshot our resources, and a population crash is quite likely.
MAMCA: When faced with hard times, I’m certain Americans will change their behavior. The economy has always recovered before.
Me: On the back of cheap energy. But those days are behind us. We face an event unprecedented in the history of the planet. We can enjoy an economic collapse and the associated Renaissance or we can suffer ecological collapse. The Renaissance will cause population reduction, but not nearly to the extent of the latter. Some leadership on this issue would be nice, although it’s clearly too late to save western civilization. Had we started on this project thirty years ago, we might be able to save some elements of civilization and avoid a large-scale die-off of civilized humans. But at this point, four years post-peak, I don’t see how we can mitigate collapse at the scale of a few million people, much less thirty million Americans or nearly seven billion planetary citizens. The famous Hirsch report concluded we’d have to start twenty years before peak to have a chance at saving civilization. And, even at that, we’d have to work at it. The federal government and the media haven’t even acknowledged the issue yet.
MAMCA: Okay, so when does collapse hit?
Me: As I already indicated, it’s already hit many people and many households. When does it hit you? That depends how wealthy you are. More importantly, it depends how willing you are to live in the world. I spent my life in the so-called ivory tower of academia. As you’ve seen, I’ve developed new skills to mitigate for a totally new set of circumstances in the years ahead. If I can do this, I’m pretty sure most people can, too.
MAMCA: I don’t have enough money to do this on my own.
Me: Neither did I. My wife and I were fortunate to have like-minded friends who generously offered their property as a starting point. We still are fortunate. Very fortunate, as it turns out. But we can all do something to prepare, especially us middle-aged, middle-class baby boomers.